President Joe Biden told CNN’s Jake Tapper on Tuesday that the prospect of a “mild recession” is possible but that he doesn’t foresee it — even as experts sound the alarm about the future of the U.S. and global economies.
“I don’t think there will be a recession. If it is, it will be a very small recession. That is, we’re moving down a little bit,” Biden told Tapper in his first exclusive interview with CNN since taking office, later adding, “It’s possible. See, it is possible. I don’t expect it.”
However, investors, economists and banks are all warning that the US is likely to enter a recession in the coming months.
Stocks fell on Monday after JPMorgan Chase CEO Jamie Dimon warned that the U.S. is likely to enter a recession within the next six to nine months. And last month, 72% of economists polled by the National Association for Business Economics said they expected the next U.S. recession to begin by the middle of next year—if it hasn’t already begun.
Bank of America said this week that the Federal Reserve’s struggle to tame inflation by continuing to raise interest rates aggressively will cause the U.S. economy to begin shedding tens of thousands of jobs a month starting early next year.
Concerns about inflation – and the increased likelihood of yet more big rate hikes from the Federal Reserve – have spooked Wall Street again, sending long-term bond yields higher. And while it may not last long, gas prices continue to rise again in most of the United States.
Meanwhile, the International Monetary Fund on Tuesday again downgraded its forecast for the global economy globally, with a stark warning: “The worst is yet to come and for many people, 2023 will feel like a recession.”
All the world’s biggest economies are slowing down, IMF Managing Director Kristalina Georgieva said last week, noting the energy crisis in Europe amid Russia’s war in Ukraine, China’s property collapse and historically high inflation in the United States.
The president suggested on Tuesday that America’s ability so far to prevent a recession despite forecasts that raised widespread concern gives him some confidence about the economy’s future.
“Every six months they look down at the next six months and say what needs to happen. It hadn’t happened yet,” Biden said, adding that “they’ve been predicting this off and on.”
He also emphasized his administration’s legislative achievements to help reduce costs, arguing, “We are in a better position than any other major country in the world, economically and politically.”
Specifically, he referred to provisions in the Act on Inflation Reduction. The law, signed into law in August, includes major changes to health care policy by giving Medicare the power for the first time to negotiate the prices of certain prescription drugs and extend expiring health care subsidies for three years.
“I mean … so much has been accomplished that the idea that … there’s an automaticity in recession just isn’t … there,” Biden noted. He later admitted that Americans “have reason to be concerned about energy prices. They have reason to be concerned about a whole range of issues. But look what we’ve done.”
With the midterm elections less than a month away, Biden also argued that Democrats have something to run despite economic problems, saying that Republicans “will raise drug prices, raise medical costs, be sure that we will no longer be able to to be able to get tax credits for weatherizing your home and saving money. I mean, I don’t know what they’re for.”